Lloyds edges closer to sale of branches to the Co-op

Lloyds Banking Group was yesterday thought to be a step closer to selling 632 branches to the Co-operative group after putting forward a “hybrid” deal to the Financial Services Authority.

The group has until November 2013 to offload the so-called Project Verde estate as a result of a penalty imposed by the EU for accepting a taxpayer bailout.

Lloyds ended exclusive talks with preferred bidder the Co-op last month, potentially opening the door to NBNK, the banking venture led by Lord Levene and former Northern Rock boss Gary Hoffman.

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Reports yesterday claimed a plan now under consideration involved Verde’s interim management team transferring with the business to run the Co-op’s enlarged banking unit.

A spokeswoman for Lloyds said only that the group continued to make progress in discussions with the Co-op.

The assets for sale comprise the 185 Lloyds TSB outlets in Scotland, 250 Lloyds branches in England and Wales, and 164 Cheltenham & Gloucester sites, as well as Intelligent Finance online banking.

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